Abu Dhabi Islamic Bank (ADIB) has provided AED 91 million ($24.8 million) in Shariah-compliant structured financing to a UAE-based private client, to purchase AED 141 million ($38.4 million) business park.
The 150,000 sq.ft. Grange Road Business Park, in Christchurch, Dorset, in the UK, is let to multinational defence, security and aerospace company BAE Systems until 2031, and will provide a cash on cash return of eight percent, said ADIB.
Paul Maisfield, ADIB’s head of UK real estate, said: “We are delighted to have supported our UAE-base client with a tailored financing solution to acquire an income producing, high-quality asset in the UK offering long-term secure income.
“The continued weakness of UK sterling against the dollar makes UK real estate an attractive proposition for investors in the Middle East seeking to diversify their portfolios.”
He added: “The primary challenge facing our clients is the very competitive nature of the UK commercial real estate market where we have witnesses a polarisation of both investor and financing appetite towards sectors and assets offering long dated and secure rental cash flows which have been more insulated from the effects of the pandemic.”
ADIB said there was growing demand for UK commercial real estate investments over the past three years.
In August 2019, ADIB UK provided financing for the Bank of London and the Middle East (BLME) to acquire a AED 120 million ($32.9 million) Grade A office building in Edinburgh.
(Writing by Imogen Lillywhite email@example.com; editing by Daniel Luiz)
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